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Wednesday, October 16, 2019

No follow through to yesterdays good session as the Dow fell 22 points on lighter volume.  The advance/declines were slightly positive.  The summation index is still trying to turn up but is in a sideways pattern.  No big headlines in the news today.  We remain short term overbought.  Earnings have yet to be a major market mover.  We are close to another line of resistance for the S&P at 3000.  If we can get through there I do believe new all time highs will be reached shortly.  GE was flat on the day but the volume improves.  Gold bounced back about ten bucks as the US dollar was lower.  The XAU rose 1 1/3, while GDX gained 1/2.  Volume was good.  Perhaps we're putting in a bottom here for the gold shares as the oversold condition remains in place.  My order for the GDX January calls hasn't been filled and will take a bit more decline or time decay to be filled.  Mentally I'm feeling OK.  The VIX remains oversold.  Even if we got a short sell off for the rest of this week, as long as the VIX remains below 16 I'll be positive on the market.  The technical set up from here appears to me to be bullish.  Yes things can change in a hurry on a negative headline but the technical backdrop is constructive in my view.  Only a couple of days to go in option expiration week.  I'll simply be sitting back and watching things at this point.  We'll roll into the November cycle and take it from there.  Asia was higher and Europe mixed last night.  We'll see what tomorrow brings.

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